Exelixis Faces Revenue Miss and Pipeline Changes: What You Need to Know
Exelixis Inc's Latest Earnings Report: What Happened?
Exelixis Inc. (NASDAQ: EXEL) recently announced its earnings for the first quarter of 2025, revealing adjusted earnings of 75 cents per share. This result exceeded analysts' expectations, as it surpassed the consensus estimate of 56 cents, although it represented a decline from last year’s figure of 85 cents per share.
Revenue Insights: Q1 Performance
In terms of sales performance, Exelixis reported revenue of $568.3 million for the quarter. Unfortunately, this was slightly below the consensus estimate of $571.27 million. A significant contributor to the revenue stream was the cabozantinib franchise, which achieved net product revenues of $520 million, an increase from $437.6 million in the same quarter of the previous year. This growth reflects stronger sales volume and highlights the product's continuing demand in the market.
Expectations for Future Revenue
Despite the slight dip in revenue, Exelixis has maintained its sales guidance for the fiscal year 2025, projecting between $2.25 billion and $2.35 billion. This guidance is just under the market consensus of approximately $2.334 billion, indicating a cautious but optimistic outlook from the company.
Pipeline Update: Delays and Strategic Changes
Focusing on its clinical pipeline, Exelixis provided insights into its major studies. The STELLAR-304 pivotal study in non-clear cell renal cell carcinoma has recently completed enrollment. However, the anticipated top-line results have been postponed to the first half of 2026, a notable delay from the previously expected results in the latter half of 2025.
STELLAR-305 Study Cancellation
Furthermore, the company made a strategic decision not to proceed with the Phase 3 portion of the STELLAR-305 study evaluating advanced squamous cell carcinoma of the head and neck. This decision was made after considering emerging competition and potential larger commercial opportunities. Initially, the phase 3 trial was set to begin by the latter part of 2025.
New Initiatives in Pivotal Studies
On a positive note, Exelixis initiated the STELLAR-311 pivotal study aimed at advanced neuroendocrine tumors (NET). Executives also plan to announce several new pivotal trials for zanzalintinib in the upcoming months, signaling their commitment to expanding their research horizons and treatment options in oncology.
Market Impact and Analyst Commentary
Market analysts, including William Blair, expressed surprise over the roughly $9 million revenue miss despite the strong performance attributed to the Cabometyx franchise. The company’s ability to capitalize on the NET market, expected to grow to $4.6 billion by 2030, creates a potentially robust growth pathway for Cabometyx.
Addressable Market for Cabometyx
With a total addressable market of $900 million for Cabometyx in the NET indication, William Blair has suggested that considerable growth could be on the horizon given the company's 35% market share in second-line and later treatment settings.
Analyst Ratings and Stock Performance
Several analysts have recently adjusted their ratings on Exelixis. Stifel has maintained its 'Hold' rating but increased its price forecast for the stock from $38 to $41. Guggenheim has reaffirmed its 'Buy' recommendation with a price target of $45, while JMP Securities has reiterated a 'Market Outperform' rating with a $50 price target.
As for the stock performance, Exelixis shares are currently trading down 16.46% at approximately $37.09 at the time of this report.
Frequently Asked Questions
What is Exelixis' recent earnings per share?
Exelixis reported adjusted earnings of 75 cents per share for the first quarter of 2025.
How did Exelixis' revenue perform in Q1 2025?
The company reported revenue of $568.3 million, slightly missing the consensus estimate.
What delayed the STELLAR-304 study results?
The results are now expected in the first half of 2026, delayed from the previously anticipated second half of 2025.
Is Exelixis pursuing any new clinical trials?
Yes, the company has initiated the STELLAR-311 pivotal study for advanced neuroendocrine tumors and will announce more trials for zanzalintinib soon.
What are the latest stock ratings for Exelixis?
Analysts have issued varying ratings, with Stifel, Guggenheim, and JMP Securities each providing updates on their price targets and recommendations.
About The Author
Contact Owen Jenkins privately here. Or send an email with ATTN: Owen Jenkins as the subject to contact@investorshangout.com.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.